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168 PART 3: THE PERSONAL SIDE OF LEADERSHIP

Exhibit 6.2 How to Act Like a Moral Leader

1. Develop, articulate, and uphold high moral principles.
2. Focus on what is right for the organization as well as all the people involved.
3. Set the example you want others to live by.
4. Be honest with yourself and others.
5. Drive out fear and eliminate undiscussibles.
6. Establish and communicate ethics policies.
7. Develop a backbone—show zero tolerance for ethical violations.
8. Reward ethical conduct.
9. Treat everyone with fairness, dignity, and respect, from the lowest to the high-
est level of the organization.
10. Do the right thing in both your private and professional life—even if no one is
looking.

Sources: Based on Linda Klebe Treviño, Laura Pincus Hartman, and Michael Brown, “Moral Person and Moral
Manager: How Executives Develop a Reputation for Ethical Leadership,” California Management Review 42,
no. 4 (Summer 2000), pp. 128–142; Christopher Hoenig, “Brave Hearts,” CIO (November 1, 2000), pp. 72–74;
and Patricia Wallington, “Honestly?!” CIO (March 15, 2003), pp. 41–42.

about the values that are important in the organization by watching leaders.
“The CEO sets the tone for an organization’s [values].” says Alfred P. West, the
founder and CEO of SEI Investments, a fi nancial services fi rm. West is careful
to espouse and model values that build integrity, accountability, and trustwor-
thiness into the organization’s culture. He answers his own phone and has the
same open-plan offi ce space as everyone else at SEI’s headquarters. He doesn’t
take stock options, pays himself a modest salary, and shuns the perks that are
demanded by many top executives. He believes if you separate your-
Action Memo
self from employees with corporate jets, enormous stock options,
and other special benefi ts, it sends the wrong message. West also
As a leader, you can drive fear out of
emphasizes open information, which he believes improves perfor-
mance as well as makes it easier for employees to report ethical
the organization so that followers feel
lapses or unfair practices. 20
comfortable reporting problems or ethical
Leaders like Alfred West put values into action. Exhibit 6.2 lists
abuses. You can establish clear ethics
some specifi c ways leaders act to build an environment that allows
policies, reward ethical conduct, and show
zero tolerance for violations.
and encourages people to behave ethically and morally. Leaders cre-
ate organizational systems and policies that support ethical behavior,
such as creating open-door policies that encourage employees to talk
about anything without fear, establishing clear ethics codes, reward-
ing ethical conduct, and showing zero tolerance for violations. After a series of
scandals rocked aerospace giant Boeing Co., new CEO Jim McNerney is trying
to ingrain ethical behavior into the fabric of the organization. McNerney has
instituted new ethics training for employees worldwide and is tying managers’
compensation to ethical leadership. Companies such as Computer Associates,
21
KPMG, and Marsh McLennan have hired high-level chief compliance offi cers
to police managers and employees. Most companies have established codes
22
of ethics to guide employee behavior, such as the clear, concise statement used
by Trans World Entertainment, shown in Exhibit 6.3. Each of the key points in
Trans World’s general statement of policy is described in detail in the company’s
complete code of ethics. However, an ethics code alone is not enough. Most
importantly, leaders articulate and uphold high moral standards, and they do the
right thing even if they think no one is looking. If leaders cut corners or bend